RISMedia's Real Estate Magazine

MAR 2019

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/1086125

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Page 42 of 126

38 March 2019 RISMedia's REAL ESTATE Those who recognize and seize the opportunity in this transitioning mar - ket will cement their dominance in ei- ther becoming or remaining success- ful real estate professionals. There are three uniquely insightful perspectives to inspire those ready to navigate through these choppy waters. Before proceeding, it should be clarified that when I refer to the luxu - ry market, this covers a much wider segment than the highly publicized multimillion-dollar sale. The reality is that entry level into the luxury arena, for a substantial part of North Amer - ica, starts at $500,000. GROWTH THROUGH LUXURY In 2008, the luxury market led real estate out of recession, with de - mand and price points escalating at almost dizzying speeds. Today, the luxury real estate market has seen the most significant impact of the slowing demand. However, globally, there are more high-net worth individuals (net as - sets of $1 - $30 million) than ever before. In 2018, there was nearly a 2 percent growth, with more than 22 million individuals with a combined net worth of $61 trillion, as per Wealth-X. This disparity of growing wealth and the perception of a slowing real estate market lies in the difference of their spend on property types, lo - cations and requirements. The biggest challenge for real es - tate professionals is the need to be prepared, in advance, of what the "next" and the "new" will be from the affluent purchaser. LUXURY BUYERS HOLD THE SOLUTION All statistical analysis and subse - quent reports indicate that there's an ongoing increase in the level of luxury inventory available. For many real estate professionals, this sig - nals difficulties for their sellers and more favorable terms for potential buyers. Savvy real estate profession - als should look to past buyers who weren't able to close on the pur - chase of a luxury property during the fast-paced, multiple-offer years. While some of these buyers may have found solutions, many decided to remain in their current properties and may not be aware that they now have the opportunity to step into their desired property type. While it's important to recognize that these types of opportunities ex - ist during transitioning markets, it's also critical for an agent to learn how to leverage them effectively. EMBRACE DIVERSITY When it comes to real estate, it's the transition of who is generating and holding the wealth that's changing at a rapid pace. While the Americas still lead both the number of high-net worth individuals and their total com - bined net worth, Wealth-X predicts that the most significant growth will be in the Asia-Pacific region over the next five years. But diversity is more than just lo - cation. There are significant changes in wealth within age groups, gender, ownership of wealth and inherited vs. self-made wealth. It's also impor - tant to understand what the "luxury" requirements are for each of these groups. Diversity in the development, build - ing, purchase, redesign and renova- tion of real estate has become the new barometer by which real estate professionals should recognize that the needs of homeowners are very different from five or 10 years ago. As historical trends show, real es - tate will continue to be driven by the diversity of demand from the high-net worth, because they not only impact the type of luxury purchase, but also create demand that will filter down through other market segments. RE Diane Hartley is president of The Institute for Luxury Home Marketing, the premier independent authority in training and designation for real estate agents working in the luxury residential market. Hartley brings her passion for luxury marketing and more than 20 years of experience growing and leading businesses to her role as president of The Institute. 3 Ways to Become a Dominant Force in the Transitioning Market T he message of a changing or transitioning market this year is echoed by many experts with varying degrees of positivity and negativity. But let's be clear: being successful in any profession requires a mixture of knowledge, skill and perception, as well as the ability to judge when there's an opportunity—and leverage it. Commentary by Diane Hartley

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